Hi Jan. Sorry about taking so long to get back to you. My webhost had more problems with my account and it's been down for about 20 hours. Part of it is working and that helps me troubleshoot the problem.
The problem seems to have corrected itself. I can view both graphic images and pdf files.
I can only assume that something my webhost did when they originally set up my account did not allow Moodle to read from the moodledocs directory.
Still not sure what they are doing but for now the problem appears to be fixed.
I appreciate your willing to help me - especially after my rant.
Thanks alot!